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Hollywood Stock Exchange: As Hollow as Lindsay, as Bankable as Derivatives

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For over a decade, it’s been a just-for-fun exercise, but now the Hollywood Stock Exchange is to start trading for real. The Cantor Fitzgerald-owned exchange, which allows people to “buy” and “sell” shares in Hollywood movies based on their projections, has just entered its final phase of regulatory review, and is expected to start trading for real on April 20.

Hollywood Stock Exchange

As well as amateur investors, who will be able to buy contracts priced at one-millionth of the movie’s projected box office, HSX is expected to attract Tinseltown insiders. As with the real thing, though, any insider dealing will not be allowed–meaning that anyone with access to early box-office data will be barred from trading, while movie financiers will be allowed to put small amounts equal to a minority percentage of their total investment in a movie. Trading on films will start six months before their release date.

To be clear, investors in this game will not be helping fund Hollywood movies — yet, although a Kickstarter-like operation is a logical next move here–nor will their winnings be actually tied to the film’s profits. Think of this as falling somwhere between the derivatives market, in which value is attached to the abstract concept of risk, and online betting.

The most fun to be had will surely be in the “stock” tips–and here are mine. Carey Mulligan: BUY. Ian Macshane: HOLD. Angelina Jolie: SELL. And Lindsay Lohan? KTHXBAI.

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